Goldman Believes Two-Thirds Of Financial Losses realised, Completely Ignores Derivatives And FAS 166/167

“Bad loans = big losses.”

Goldman’s most recent quantification of bank losses begins objectively enough, yet promptly devolves into yet another cheer fest for the financial system.

GS promptly rehashes its estimate of “only” $2.1-2.6 trillion in bank losses, slighty adjusting the composition of loans it believes will go bad, while completely ignoring the onboarding of off-balance sheet liabilities (FAS 166-167) as well as any and all potential losses in the derivative realm, where Goldman itself is on the hook for tens of trillions in gross notional.

The only thing missing from this fluff piece is a Conviction Buy rating on Goldman itself (but the Conviction Buy on toxic credit card and real estate debt laden BAC, JPM and COF is certainly present).

Continue reading at Zero Hedge >>

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